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U.S. regulators have allowed a Canadian company to restart its Keystone oil pipeline after completing repairs and safety tests.

Oil from the 1,300-mile pipeline that extends from Canada to Oklahoma and Illinois could begin flowing as soon as Sunday under a revised order from the U.S. Pipeline and Hazardous Materials Safety Administration. The agency approved the revision on Saturday.

The pipeline has been closed since May 29, when workers reported a 10-barrel leak in Kansas. That followed a leak of 400 barrels of oil in North Dakota on May 7.

The pipeline is owned by Calgary-based TransCanada Corp.

 

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Federal regulators on Friday ordered the shutdown of the $5.2 billion Keystone oil pipeline following two more leaks, this time at pump stations in Kansas and North Dakota. They were at least the 11th and 12th leaks since the pipeline began operation a year ago.

The order from the Department of Transportation's Pipeline and Hazardous Materials Safety Administration came after regulators determined that continued operation of the line "would be hazardous to life, property and the environment."

The order prevents TransCanada, the pipeline's owner, from restarting operations until the agency is satisfied with repairs and is confident that all immediate safety concerns have been addressed.

The Keystone pipeline stretches 2,151 miles from Alberta's Athabasca tar sands to the ConocoPhillips' Wood River refinery in Roxana, then on to Patoka, Ill. One of the longest and most expensive pipelines ever built in North America, Keystone can carry almost 600,000 barrels a day, enough to supply about 2 percent of the country's daily demand. Oil began reaching the refinery in late June 2010.

The order Friday requires TransCanada to perform mechanical and metallurgical testing and root-cause failure analysis, review other parts of the pipeline for similar problems, make permanent repairs and continue ongoing monitoring. Federal inspectors will closely review the repair work.

TransCanada officials said Friday that they would comply with the order and that equipment modifications and replacements already are under way at the affected pump stations.

Company spokesman Terry Cunha said the line had been shut down since Sunday after 10 barrels of crude oil leaked at a pump station in Doniphan County, Kan. That followed a May 7 failure at a pump station in Sargent County, N.D., that released 400 barrels.

Company officials declined to say how much the shutdown was costing TransCanada and were uncertain how long the line would remain idle.

"At the moment our focus is on getting the system up and running safely, and we will keep our shippers informed as we move forward," Cunha said. "We hope to be up and running soon."

Opponents of the pipeline say the federal shutdown raises serious doubts about TransCanada's ability to safely build and operate a pipeline to transport thick tar sands oil from Canada. The tar sands are a combination of clay, sand, water and bitumen — a heavy black asphalt-like hydrocarbon that can be refined to make asphalt, gasoline, jet fuel and other chemicals.

Last year, the company was ordered to dig up about a dozen sections of the pipeline, including one in Missouri, after government-ordered tests indicated that defective steel may have been used in its construction.

The pipeline crosses 280 miles and 10 counties in Missouri and 60 miles and four counties in Illinois. The mostly 30-inch-diameter pipe is buried 4 feet underground in most places. In Missouri, almost all the pipeline route is on privately owned land and, except in Troy and St. Charles, runs mostly through agricultural areas. The pipeline cuts diagonally through Lincoln County, then burrows across northern St. Charles County before plunging 65 feet beneath the Mississippi River and surfacing in Hartford, just a short distance from Roxana. It skirts Edwardsville on its way to oil storage facilities in Patoka.

Conservation groups and some members of Congress have warned that the high-pressure pipelines are unsafe and put property and the environment at risk.

"TransCanada said they can make a nearly perfect pipeline. The truth of the matter is it hasn't," said Paul Blackburn of Plains Justice, a public interest law center that has been critical of the pipeline. "We continue to be concerned that a major spill is possible, and TransCanada needs to provide substantially more equipment and resources in the event of such a spill."

Anthony Swift of the Natural Resources Defense Council said the frequency and magnitude of leaks on the line make it clear that problems exist. In a 2006 risk assessment, TransCanada predicted fewer than two spills would occur over a 10-year-period.

"The kinks are not worked out on these pipelines," Swift said. "We need time to assess how they can be built and maintained safely before we build new ones."

The government-ordered shutdown comes as TransCanada is seeking State Department approval for the Keystone XL line, a larger and longer version of the Keystone line. If approved, Keystone XL would stretch from Alberta to Houston and would carry about 810,000 barrels a day. Opponents argue those plans should be put on hold.

"We shouldn't be doubling down on danger," said Josh Mogerman of the Natural Resources Defense Council.

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